Casey wants to calculate the monthly payments for each loan option that he is considering. Switch to the Loan Options worksheet. In cell B12, create a formula using the PMT function to calculate the monthly payments for loan Option A. Use the values in cells B8, B10, and B5 for the Rate, Nper, and Pv arguments, respectively, and do not enter any values for the optional arguments. Copy the formula you created in cell B12 into the range C12:D12.

= PMT(B8/12,B10,B5)

Explanation:

The excel PMT function is calculated using the following formula

PMT(rate, nper, pv, [fv], [type])

Where rate = rate of payments per month

nper = duration of payment in month

pv = Present Value

fv = future value (it's an optional field)

type = payment type (it's an optional field)

Given that

B8 = rate

B10 = nper

B5 = pv

In cell B12, type the following

= PMT(B8/12,B10,B5)

We're making use of B8/12 because we need the rate to be in months not years.

Since there are 12 months in a year, monthly rate = B8/12

To use this formula in C12:D12

Use the following;

In cell C12, type the following

= PMT(C8/12,C10,C5)

In cell D12, type the following

= PMT(D8/12,D10,D5)

the correct answer option is b. a single paragraph.

explanation:

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